Finra Warns Against Conflicts in Retirement-Plan Rollovers

Posted on January 17th, 2014 at 2:30 PM

From the Desk of Jim Eccleston at Eccleston Law Offices:

Finra announced that it is investigating potential conflicts of interest that could affect brokers when they roll over a client's company retirement plan into an individual retirement account.

In the regulatory notice, Finra warned member firms that they should not recommend that a client who is leaving a company transfer money from the company's 401(k) plan into an IRA if it is more prudent to leave the money in the company plan, or transfer it to the client’s new employer's plan. In addition, Finra emphasized that any recommendation from brokerage firms must be suitable for the customer and that the information investors receive must be fair, balanced and not misleading. The suitability responsibilities of a broker-dealer or registered representative should never be compromised by their financial interest in recommending an IRA rollover or other action.

Finra advised brokerages they must ensure that they are training their registered representatives to understand the tax, fee and investment implications of a rollover,  consistent with their client's financial needs and objectives. Any pitch for IRA money must give 'fair and balanced' information about other options. 

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services. 

Related Attorneys: James J. Eccleston


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Fantastic news!!!!  Your professionalism, support and expertise were greatly appreciated.  You made a difficult situation much more bearable.

Marci M.


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